Per Capita Federal Spending Shows 40-Year Trends

Veronique de Rugy has performed a real service by compiling the data shown in the chart below, in a manner that I haven’t seen it before. The chart depicts per capita federal spending from 1962 to the present, broken down into three categories: discretionary, mandatory and net interest, and stated in constant 2014 dollars. First the chart, then some comments about it. Click to enlarge:

Shown on a per capita basis and broken down into these basic components, federal spending appears less like a monolithic, irresistible rising tide. Trends become more apparent. Most obvious, of course, is the fact that entitlements have come to dominate federal spending. Discretionary spending, meanwhile, has been relatively flat on a per capita, inflation-adjusted basis.

It declined after Republicans took control of Congress in 1994 and started to rise again in 2002. I suppose that mostly represents increased spending on defense after 9/11. (One way in which this chart could be more helpful is if discretionary spending were broken down into defense and non-defense.) Discretionary spending leveled off after 2004, but then started to rise rather sharply after Democrats took control of Congress in 2007, and President Obama took office in 2009. It then declined again after Republicans took the House in the 2010 midterm elections, and spending caps were put in place that have applied for the last several years–even though those caps have not always been observed.

The less subtle point is that overall federal spending has been an ever-growing burden on the American people. On a per capita, constant dollar basis, it tripled between 1962 and 2009. The difference–that is, the growth since 1962–is around $8,000 per person, or $32,000 for a family of four. One could calculate, crudely, that for the one-half of American households that pay federal income taxes, the increased burden of federal spending since 1962 was at least $64,000 annually for a family of four. To the extent that some of that spending was paid for with borrowed dollars, it merely postpones the burden to the next generation, and adds interest to it–interest that will be at much higher rates in the years to come.

You can pore over the chart and draw your own conclusions, but I don’t see how anyone can look at the numbers without concluding that the number one fiscal imperative for the federal government is to reduce spending on Social Security, Medicare and Medicaid.